Founder of hydrogen truck maker Nikola, Trevor Milton charged with fraud (with video)
Founder of hydrogen truck maker Nikola Motors, Trevor Milton charged with fraud, pleads not guilty to three charges.
Nikola’s statement says government actions are against Milton, not the company
As U.S. Attorney Audrey Strauss began citing the numerous lies alleged against Nikola founder Trevor Milton during a Thursday news conference to discuss the grand jury indictment, she utilized an apt phrase given his former company’s position as a green-vehicle maker.
“Today’s criminal charges against Milton,” she said, “are where the rubber meets the road.”
That road, at least for Milton, will prove extremely difficult to navigate if federal prosecutors succeed in proving their case, one in which they claim he “lied about nearly every aspect of the business” in order to drive investor demand for Nikola stock.
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The first big legal step was taken Thursday morning when Milton was charged with three counts of fraud by the U.S. Attorney’s Office in Manhattan in connection with the investigation into the electric vehicle startup. The charges involved two counts of securities fraud and one count of wire fraud.
Milton was taken into custody in the morning, then appeared in front of Magistrate Judge Sarah Netburn in the Southern District of New York on Thursday afternoon. He pled not guilty to all three charges and was freed on a $100 million bond.
His attorneys also released a statement that read, in part: “Trevor Milton is innocent; this is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.”
According to Bloomberg, the bail was secured by two properties in Utah owned by Milton — one worth $36 million, the other worth $4 million.
In addition to the criminal charges, civil charges were filed by the Securities and Exchange Commission for “repeatedly disseminating false and misleading information typically by speaking directly to investors by social media about Nikola’s products and technological services,” according to Gurbir Grewal, the SEC’s director of the Division of Enforcement.
Nikola was quick to distance itself from Milton, issuing a statement that read, “Trevor Milton resigned from Nikola on September 20, 2020, and has not been involved in the company’s operations or communications since that time. Today’s government actions are against Mr. Milton individually and not against the company.
“Nikola has cooperated with the government throughout the course of its inquiry. We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities.”
Even so, the news was immediately felt on Wall Street, as Nikola’s (NASDAQ: NKLA) share price dropped 10% in the first 40 minutes of trading Thursday and was still down 9% halfway through the day.
Meanwhile, the SEC investigation is still ongoing and Nikola could get fined for its days under Milton.
Read the full and original article HERE
WATCH: Prosecutors discuss charges vs. Milton
Video credits: CNBC TV/ Youtube
Source and credits: freightwaves.com
iTrucker / Mario Pawlowski / iTrucker.com
FreightWaves staffers Alan Adler and Brian Straight contributed to this report.
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